United States

Scotiabank filed for SEC registration this week, increasing the likelihood of other issuers filing programmes with the SEC, a US lawyer told The Cover on Thursday.

Sweden’s Stadshypotek took the year’s total for dollar covered bond issuance past $10bn this week with a $1.25bn five year deal. Nordic issuers’ spreads are closing in on those of their Canadian peers and dollar covered bonds from many countries have become expensive compared to Treasuries, said Barclays analysts.

UBS and Swedbank closed dollar benchmarks this week, pricing their deals well inside where they could have funded in euros. Demand in the dollar market far outstrips supply, and the eager investor base should help draw more borrowers looking to take advantage of the arbitrage.

DNB Boligkreditt began marketing a five year dollar covered bond on Thursday, its first benchmark in the currency in two years.

Under a new model, that will be used to analyse Canadian covered bonds, Fitch said on Tuesday that Canadian house prices were overvalued by a real 20%, which is more than bankers had previously said.

Korea Housing Finance Corp opened books on its latest benchmark covered bond on Tuesday. It is only the second dollar deal of the year, and this lack of issuance, together with a triple-digit starting spread should mean a successful outcome, said bankers.

Commonwealth Bank of Australia is ready to launch the first Australian covered bond of the year, after mandating banks for a benchmark US dollar deal that an official close to the deal told The Cover was likely to come on Wednesday. The Australian covered market is set to be the fastest growing this year, with Fitch predicting up to $37bn of supply.

Bayerische Landesbank sold its second ever dollar covered bond benchmark on Tuesday, pricing a $500m two year trade that carried one of the lowest ever coupons in the dollar covered bond market.

Norddeutsche Landesbank has sold a stand-out debut dollar covered bond, ending Germany’s six year absence from the 144A covered market. The three year deal on Wednesday carried the lowest ever coupon for a covered bond in that currency and is the only outstanding public sector backed trade in the dollar covered market.

Royal Bank Canada has priced the first SEC registered covered bond in what is likely to be the landmark US dollar trade of the year. The long awaited deal was notable for the breadth of investor demand, its historically low coupon and exceptionally tight spread.

The stressed cover pool losses of Australia’s covered bonds are worse than those in core Europe, Moody’s first performance overview of the jurisdiction revealed on Tuesday. However, Australia still boasts highly rated issuers and impressive collateral scores.

The fledgling US covered bond market took a big step forward this week, after Royal Bank of Canada gained SEC registration for its $12bn covered bond programme. RBC could now bring the first SEC registered covered bond before the end of August.